How will crypto markets react to this week’s key jobs data?

Meanwhile, crypto assets continue to decline in what has been a divergence from tech equity markets, which continue to grow.

Last week’s economic reports painted an upbeat picture of a robust economy, resilient consumer spending and gradually cooling inflation.

That’s the fuel for the Federal Reserve to ease monetary policy, with investors eyeing a rate cut this month.

Economic events from September 2 to 6

This week’s economic calendar will focus on employment reports. “We expect high volatility and excellent trading conditions with a focus on August jobs data,” commented Kobeissi’s letter.

Monday is a holiday in the US, but the August ISM Manufacturing PMI reports will be released on Tuesday. These data reflect business conditions in the manufacturing sector and are a measure of general economic conditions.

Wednesday and Thursday will see data from the Survey of Job Offers and Labor Rotation (JOLTS), non-farm employment data and initial unemployment claims data. These reports provide data on new jobs created and the percentage of people actively looking for work in the previous month.

More jobs data will be released on Friday, providing key indicators as the central bank considers changes in the labor market when making decisions.

Key events this week:

1. Markets closed for Labor Day – Monday

2. August ISM Manufacturing PMI data – Tuesday

3. Data on the job offers of the July JOLTs – Wednesday

4. August Non-agricultural employment data ADP – Thursday

5. Initial data on unemployment claims – Thursday

6. August Employment Report -…

— Kobeissi Letter (@KobeissiLetter) September 1, 2024

Fed Chairman Jerome Powell stressed that the central bank does not want to see a further cooling in the labor market. That puts more emphasis on Friday’s August payrolls data.

Very weak data could make a rate cut of 50 basis points more likely, and on the other hand, strong data could rule out a larger cut. Investec economist Lottie Gosling commented:

“While Powell declined to comment on whether the door might be open to a 50 basis point (rate) cut in September, we suspect that a clear further deterioration in the labor market could lead the FOMC to more aggressive easing.”

Crypto market outlook

Crypto markets have weakened over the weekend with a drop of around $75 billion. They fell further during Monday morning’s Asian trading session with a 3.7% drop in total market capitalization to $2.11 trillion.

Bitcoin continued to slide, down another 2% on the day in a slide to $57,500 at the time of writing. Currently, the levels serve as support, but if BTC loses this ground, it could quickly retest the next level of $56,000.

In theory, a September rate cut would be bullish for the crypto, so this week’s employment data could have an immediate impact on market volatility.

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